Technology and innovation in supply chain
ARTICLES BLOK 1 – ROTTERDAM BUSINESS SCHOOL – 2020/2021 – MSCTIS120
Tabel of content
The inventory optimization maturity curve ........................................................................................................ 2
Exponential technology defined ......................................................................................................................... 3
Understanding the socioeconomic drivers of Megatrends ................................................................................. 4
Blockchain and more – algorithm driven food traceability................................................................................. 5
Where are you on the supply chain control tower journey? ............................................................................... 7
Value and resilience through better risk management ...................................................................................... 8
World's First High-Frequency Decentralized Energy Market Helps Drive Port of Rotterdam's Energy Transition
.......................................................................................................................................................................... 11
, The inventory optimization maturity curve
Inventory optimization à IO
The business challenge is the same today as ever, hold the least amount of inventory while
meeting customer service requirements, but the methods have changed.
An organization must first understand where it sits on the IO maturity curve in order to
pursue a journey toward superior competitiveness and outstanding profitability.
People, process and technology: conduct a people and process review. Look for knowledge
that is already present in the organization and consider adding a trained resource to support
IO initiatives. Also, make sure that executive budget for the proves changes and
organizational modification required.
The IO technology maturity curve (4 stages)
- The team ultimately creates a multi-echelon inventory optimization model
Stage 1: single item/location: describes your situation, there is good news, you have a big
opportunity, and right away there are simple low hanging fruit actions you can take that will
deliver impressive results
- Small companies at the beginning
Stage 2: single site (single tier): at this level of maturity the science is more advanced. This is
the point at which operationally focussed ERP systems starts to struggle.
- Tactical safety stock look at locations
Stage 3: multi-echelon: companies at this level are optimizing inventory policies as well as
tactical targets to achieve higher service levels while freeing up working capital trapped in
excess inventory. This level IO maturity requires advanced dynamic programming using non-
linear mathematics that cannot be performed using ERP, traditional inventory planning,
warehousing management systems or spreadsheets.
Stage 4: strategic MEIO: at this level MEIO is deployed across all business units and supply
chains, used as a trusted business process company-wide. Optimized inventor levels are
viewed as an input to the sales and operations planning process, rather than as an output.
ARTICLES BLOK 1 – ROTTERDAM BUSINESS SCHOOL – 2020/2021 – MSCTIS120
Tabel of content
The inventory optimization maturity curve ........................................................................................................ 2
Exponential technology defined ......................................................................................................................... 3
Understanding the socioeconomic drivers of Megatrends ................................................................................. 4
Blockchain and more – algorithm driven food traceability................................................................................. 5
Where are you on the supply chain control tower journey? ............................................................................... 7
Value and resilience through better risk management ...................................................................................... 8
World's First High-Frequency Decentralized Energy Market Helps Drive Port of Rotterdam's Energy Transition
.......................................................................................................................................................................... 11
, The inventory optimization maturity curve
Inventory optimization à IO
The business challenge is the same today as ever, hold the least amount of inventory while
meeting customer service requirements, but the methods have changed.
An organization must first understand where it sits on the IO maturity curve in order to
pursue a journey toward superior competitiveness and outstanding profitability.
People, process and technology: conduct a people and process review. Look for knowledge
that is already present in the organization and consider adding a trained resource to support
IO initiatives. Also, make sure that executive budget for the proves changes and
organizational modification required.
The IO technology maturity curve (4 stages)
- The team ultimately creates a multi-echelon inventory optimization model
Stage 1: single item/location: describes your situation, there is good news, you have a big
opportunity, and right away there are simple low hanging fruit actions you can take that will
deliver impressive results
- Small companies at the beginning
Stage 2: single site (single tier): at this level of maturity the science is more advanced. This is
the point at which operationally focussed ERP systems starts to struggle.
- Tactical safety stock look at locations
Stage 3: multi-echelon: companies at this level are optimizing inventory policies as well as
tactical targets to achieve higher service levels while freeing up working capital trapped in
excess inventory. This level IO maturity requires advanced dynamic programming using non-
linear mathematics that cannot be performed using ERP, traditional inventory planning,
warehousing management systems or spreadsheets.
Stage 4: strategic MEIO: at this level MEIO is deployed across all business units and supply
chains, used as a trusted business process company-wide. Optimized inventor levels are
viewed as an input to the sales and operations planning process, rather than as an output.
